Nike. Photo: ukrinform
The total amount of payments
Nike Inc. announced that the total cost of labor and benefits for former CEO John Donagho reached nearly $104 million during his nearly five-year tenure. This amount includes salary, bonuses and shares, and serves as a reminder of how top managers can receive huge rewards even in difficult times. This is reported by Bloomberg.
Billions lost
Nike lost an estimated $40 billion in market value during Donagho’s tenure. According to estimates by Bloomberg News, he received $83.6 million in salary, bonuses and stock awards. This shows the paradoxical nature of corporate governance, where executives receive astronomical sums despite negative results.
Remuneration and changes in management
Nike paid Donagho $35 million in lost wages when he was fired from his previous position. The company announced Thursday that Donahoe is retiring and will remain an adviser through January. He will be replaced by Nike veteran Elliott Hill, who aims to revive the brand.
Market reaction
Shares of Nike jumped 8% in premarket trading after the management shakeup was announced. However, Donagho’s departure will result in the forfeiture of more than $5 million in unvested awards.
The future is under new management
Elliott Hill will receive annual compensation of about $20 million, including stock options and special awards of $7 million. If Hill can improve the company’s financials, it will also benefit Donagho, who still has more than 1.5 million stock options that could yield profits.
